FSC and FSS announced their plans for the early adoption of the credit risk framework in Basel III. The announced adoption timeline of late June this year is more than one and a half year before January 01, 2022, which is the recommended adoption timeline by BCBS. The early adoption of the revised credit risk framework will begin gradually with domestic banks and bank holding companies. Additionally, changes to the calculation of operational risk capital will be implemented as scheduled in January 2022.
With the early adoption of Basel III rules, the government expects that banks with high proportions of business lending will see their BIS capital adequacy ratios increase, thus enabling banks to boost capital reserves to provide more funding to businesses. The government will finish revising the relevant rules and regulations in April, while providing assistance to financial companies to ensure that their system setup and verification are done smoothly. The government will continue to work on ways to ensure that the prudential regulations on financial institutions do not constrain their ability to respond flexibly in times of crisis.
Related Link: Press Release (PDF)
Keywords: Asia Pacific, Korea, Banking, Credit Risk, Basel III, Operational Risk, Standardized Approach, IRB Approach, BCBS, FSS, FSC
Previous ArticleAPRA Announces Deferral of Capital Reform Implementation
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.